StartUp Perspective: How to Outscale the Competition

Historically, scaling your startup has always been a measured and calculated process. Modern silicon valley SaaS companies have been shattering stereotypes and setting new trends for how a company can scale at lightning speed. While some of these ideas may seem blasphemous according to classical startup wisdom, there is no denying the success and ingenuity that these businesses have achieved. 

Let’s get right into it:

Establish Your Value

Before you can start to scale and reach the exit velocity necessary to separate yourself from the competition, you need to definitively lock in the value you offer your customers or users.  Getting a product ready should of course be the first step – but there is no better advice on how to better your value than advice from potential customers. Try to get your product in the hands of real people and conduct product testing as fast as possible in order to solidify your value.

Prioritize Speed Over Efficiency

Once you have produced some solid product testing and have tailored your product to be unique, disruptive, and valuable, it is time to scale. As startup Guru Reid Hoffman puts it, prioritizing speed over efficiency early on can help you accelerate scale at unprecedented speeds. Sacrificing unnecessary “extras” in your product, focusing on the core MVP, and keeping it simple early on will allow you to focus on allocating funds to getting more customers.

For example, Reid states in an interview “…I said look. We’re going to launch this basic product with basic principles, and whatever we learn from the customer data – that’s the next feature we’ll build.”

Reid was saying this in response to his board pushing for a variety of extra features they thought would be valuable prior to launch. He is furthering the point that you need to be able to make big decisions as you scale in order to reach the exit velocity, rather than assuming what customers will like before they even try the MVP.

Focus on Early Adopters While You Can (AirBnB Story)

In their infancy, AirBnB was obsessed with their early adopters. So much so that they would personally pay a visit to their first hosts that signed up just to personally meet them and find out answers to important questions such as:

  • What did you like about the hosting experience?
  • What could be improved?
  • Why was AirBnB appealing to you initially?

As CEO Brian Chesky put it, “This is when we decided to do things that wouldn’t scale. We would commute from Mountain View to New York City (where most of their hosts were) and we would meet with every single host. We would live with each of the hosts and write the very first reviews. We would also help them take photos because this was pre-iPhone and it was hard to get pictures onto your computer for our hosts.


If you can get even 1 person to love you, then you can go person by person — the challenge is how to scale that. It’s much easier to scale something — 100 people love vs. getting 1M who like you to love you.

Don’t Overthink (Or It Will Be Too Late)

If you aren’t embarrassed by your first release in some sense, you’ve probably released too late. Multiple startup leaders champion this philosophy including Reid, Brian, and Chris Yeh. They all believe in diving straight into scaling and customer research rather than spending multiple years attempting to develop the “perfect” product. As the saying goes, startups don’t just die, they simply fade away. 

Prioritizing speed over efficiency at the right time is critical. 

Sacrificing some typical startup wisdom initially can free up resources for product development and scaling that others won’t have.

At the end of the day, if your value is solid and you understand the market you are getting into there is some classic startup wisdom you can ignore in order to scale faster. Focus on learning from your initial customers in order to reach the exit velocity necessary to put distance between you and your competition faster. Making the right decisions as you scale is a better gamble than letting the competition gain traction while you haven’t even launched yet. 

 

References:

  1. Reid Hoffman, “Blitzscaling: From Startup to Global Giant”, Interview, https://www.youtube.com/watch?v=XiANesZ7YOA

  1. “Scaling AirBnB with Brian Chesky”, Medium, https://medium.com/cs183c-blitzscaling-class-collection/scaling-airbnb-with-brian-chesky-class-18-notes-of-stanford-university-s-cs183c-3fcf75778358

Daren Trousdell is an early stage investor, advisor and founder focused in the Fintech and Digital Media space.

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